Last Update 11 Jan 26

Fair value Increased 19%

SGHT: Final Medicare Coverage Will Support Dry Eye Upside Potential

Analysts have lifted their price target on Sight Sciences from $7.85 to $9.35, citing recent Medicare coverage decisions for the TearCare dry eye disease treatment system as a key support for their updated view.

Analyst Commentary

Bullish Takeaways

Bullish analysts view the finalized Medicare coverage policies for TearCare as a key support for the higher price targets, since clearer reimbursement can make revenue visibility easier to model.
The move from a US$5 to US$7 target is framed as a response to improved coverage clarity, which they see as a potential catalyst for stronger execution in the dry eye disease segment.
Coverage decisions from multiple Medicare administrative contractors are seen as validation of TearCare’s role in dry eye treatment, which bullish analysts think could support longer term procedure volumes and pricing stability.
Analysts lifting targets suggest they are more comfortable with the risk and reward profile tied to reimbursement, which they see as a key input to valuation for a procedure based system like TearCare.

Bearish Takeaways

Bearish analysts may point out that while Medicare coverage is now finalized by some contractors, broader adoption and consistent utilization across providers still need to be proven and could affect execution.
There can be caution around how quickly TearCare usage could scale under the new policies, which introduces uncertainty around how the higher price targets relate to near term growth.
Some may question whether a single system and indication can fully justify higher valuations without clear evidence of uptake across different geographies and practice types.
Reimbursement clarity does not eliminate typical risks around procedure based products, such as physician training, workflow changes and patient awareness, all of which can influence realization of analysts’ more optimistic scenarios.

What's in the News

Sight Sciences reported results from three published manuscripts on its OMNI technology in glaucoma, including a 24 month prospective study of 18 eyes where mean baseline intraocular pressure (IOP) of 26.1 mmHg was lower by 9.7 mmHg at 12 months and 10.6 mmHg at 24 months after standalone OMNI use, with medication washout at baseline, 12 and 24 months (Key Developments).
In a retrospective observational study of nearly 13,000 African American eyes that compared cataract surgery alone with several minimally invasive glaucoma surgery options used at the time of cataract surgery, the MIGS plus cataract cohorts showed greater IOP reductions than cataract surgery alone, with the share of patients achieving at least a 20% IOP reduction highest for OMNI, followed by Hydrus Microstent and iStent injection (Key Developments).
A subgroup analysis of 220 eyes treated with standalone OMNI in primary open angle glaucoma reported IOP reductions that were maintained for up to 3 years across mild, moderate and severe disease and in both phakic and pseudophakic eyes (Key Developments).
The company announced that two Medicare Administrative Contractors, Novitas Solutions and First Coast Service Options, set jurisdiction wide pricing for CPT code 0563T, which covers TearCare procedures, with fee schedule amounts effective for services on or after January 1, 2025 in their regions, representing about 10.4 million Medicare fee for service covered lives or roughly 30% of that population, and noted that TearCare claims in these areas will be payable based on individual medical necessity determinations (Key Developments).
Sight Sciences raised its full year 2025 revenue guidance to a range of US$76.0 million to US$78.0 million, described as a 2% to 5% decline compared with full year 2024 revenue, compared with prior guidance of US$72.0 million to US$76.0 million (Key Developments).
The company appointed Alison (Ali) Bauerlein as Chief Operating Officer and James (Jim) Rodberg as Chief Financial Officer, both effective November 5, 2025, following Bauerlein’s prior role as CFO at Sight Sciences and earlier experience cofounding and serving as CFO of Inogen, and Rodberg’s prior roles as Vice President of Finance and Corporate Controller at Sight Sciences and finance leadership roles at several medical technology companies (Key Developments).

Valuation Changes

Fair Value: updated from US$7.85 to US$9.35 per share, a rise of US$1.50 in the modelled estimate.
Discount Rate: adjusted slightly from 7.88% to 7.92%, indicating a marginally higher required return in the analysis.
Revenue Growth: kept effectively unchanged at about 12.96% in both the prior and updated assumptions.
Net Profit Margin: moved slightly lower from 12.91% to 12.90% in the updated margin assumption.
Future P/E: increased from 39.70x to 47.39x, reflecting a higher multiple applied in the forward earnings framework.

Expanding chronic eye disease prevalence and innovation in minimally invasive solutions are driving strong demand, higher utilization, and opportunities for accelerated growth and margin expansion.
A large unreached market for dry eye therapy and anticipated regulatory milestones position the company for significant future growth in revenue and market share.
Limited reimbursement, regulatory and tariff headwinds, heightened competition, and over-reliance on a narrow portfolio threaten both growth prospects and the path to profitability.

Catalysts

About Sight Sciences

An ophthalmic medical device company, focuses on the development and commercialization of surgical and nonsurgical technologies for the treatment of eye prevalent diseases.What are the underlying business or industry changes driving this perspective?

The company is positioned to benefit from increasing global prevalence of chronic eye diseases, such as glaucoma, driven by aging populations and expanding healthcare access-catalyzing sustained multi-year growth in device demand and top-line revenues.
There is strong ongoing momentum for Sight Sciences' minimally invasive solutions (OMNI and OMNIEdge), leveraging the industry shift toward less invasive surgeries that promote faster recovery, support higher procedure volumes, and could drive both revenue growth and improved operating margins.
Management has built a scalable commercial infrastructure and deep surgeon relationships, leading to record-high ordering accounts and sequentially increasing utilization rates-trends that, once market headwinds abate, are likely to accelerate recurring sales and gross margin expansion.
Large, untapped market opportunity in reimbursed interventional dry eye therapy (TearCare), supported by robust, recently-published long-term clinical and cost-effectiveness data-once reimbursement is secured, this is expected to be a major growth catalyst for both revenue and earnings.
Recent investments in pipeline innovation (e.g., iterative OMNI platform improvements and ongoing R&D projects), alongside pending regulatory and payer coverage decisions, position the company to capitalize on future technological adoption trends and increase market share, supporting a rerating of valuation multiples on sustained earnings growth.

Sight Sciences Earnings and Revenue Growth

Sight Sciences Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Sight Sciences's revenue will grow by 10.9% annually over the next 3 years.
Analysts are not forecasting that Sight Sciences will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Sight Sciences's profit margin will increase from -64.2% to the average US Medical Equipment industry of 12.5% in 3 years.
If Sight Sciences's profit margin were to converge on the industry average, you could expect earnings to reach $13.0 million (and earnings per share of $0.23) by about September 2028, up from $-49.0 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 24.3x on those 2028 earnings, up from -4.1x today. This future PE is lower than the current PE for the US Medical Equipment industry at 28.6x.
Analysts expect the number of shares outstanding to grow by 3.18% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.91%, as per the Simply Wall St company report.

Sight Sciences Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Ongoing lack of reimbursement coverage and uncertain timing for payer approval of the TearCare technology in the Dry Eye segment could severely limit revenue recovery in that business and delay reaching overall profitability, especially as current guidance does not factor in positive coverage in 2025.
Declining Surgical Glaucoma segment revenue versus prior year (down 5% year-over-year in Q2 2025) and persistent headwinds from Medicare LCD coverage restrictions, which limit the use of multiple MIGS procedures, may pose sustained challenges to revenue growth and reduce momentum in Sight Sciences' core business.
Competitive intensity remains high, with new entrants and established players launching rival MIGS products, potentially threatening Sight Sciences' market share gains and pressuring both revenues and average selling prices over the long term.
Elevated tariffs on imported products from China and shifting global trade dynamics result in tangible cost of goods sold increases ($1 million to $1.5 million expected in 2025 for Surgical Glaucoma), with ongoing uncertainty around future tariff rates, which may further erode gross and net margins.
Heavy dependence on a narrow portfolio (OMNI and TearCare), combined with the risk of new evidence challenging clinical differentiation or payer coverage, means any disruption, unfavorable regulatory changes, or pipeline setbacks could impair long-term revenue growth and push out the company's path to profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $4.417 for Sight Sciences based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $5.0, and the most bearish reporting a price target of just $4.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $104.1 million, earnings will come to $13.0 million, and it would be trading on a PE ratio of 24.3x, assuming you use a discount rate of 7.9%.
Given the current share price of $3.8, the analyst price target of $4.42 is 14.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Expanding Healthcare Access And Chronic Eye Disease Trends Will Boost Minimally Invasive Procedures